Proposed Rules Address ACA Relief for Expat Health Plans

New tri-agency proposed regulations implementing the Expatriate Health Coverage Clarification Act of 2014 (EHCCA) outline the conditions an expatriate medical plan or policy must meet to exempt the plan, sponsoring employer, and expatriate health insurers from certain Affordable Care Act (ACA) requirements. Generally, EHCCA exempts plans or policies that meet the law's definition of an "expatriate health plan" from certain ACA market reforms, fees, and aspects of the "Cadillac" excise tax on high-cost health benefits. The proposal clarifies which individuals are qualified expatriates, which insurers can issue qualified expatriate coverage, as well as other important requirements to take advantage of the EHCCA relief.

The same regulatory project contains proposals on several types of insurance that may qualify as excepted benefits under the Health Insurance Portability and Accountability Act (HIPAA). Excepted benefits are exempt from many of the ACA’s plan design requirements that otherwise affect plans and policies. These proposed regulations describe requirements for exempt status of travel, group hospital indemnity or other fixed indemnity, specified disease or illness, and supplemental health insurance. Also proposed is restricting short-term limited duration coverage to policies with a maximum duration of less than three months; it’s thought this will avoid the use of short-term policies to circumvent ACA requirements while still permitting short-term coverage to assist individuals transitioning from one plan to another.

The proposals — issued jointly by the departments of Labor, Treasury, and Health and Human Services — are proposed to be effective for plan or policy years beginning on or after Jan. 1, 2017. Comments are due August 9. The proposed regulations can be relied on until final regulations take effect. If final guidance is more restrictive it will apply prospectively with time to come into compliance.

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